Over the years, we have spent thousands of hours talking with our traders and answering their emails. We have a huge collection of really great information that only benefited the specific traders who we were interacting with. So, we decided to start sharing all of these gems of knowledge with everyone.

Tuesday, March 28, 2017

All three majors continued higher today after bouncing off their 50-day moving averages yesterday. Sentiment is still leaning to the bullish side with what appears to be a bull pullback to this point; however, we will need to keep our eyes on support levels moving forward. A close below the markets’ current support levels would not be seen as bearish, but would make a strong argument for more consolidation/sideways.

We have seen some bullish trades trigger this week and there are plenty of good trades out there to the upside. If you find your portfolio too bullish, then look to add some sideways trades. Depending on if the markets will retest upper resistance in the next few weeks vs. next few days, we should see sideways trade opportunities.

Thursday, March 23, 2017

The markets started the day strong, but could not hold gains and closed flat on the session. After Tuesday's bearish surge, we were expecting to see more selling. However, this was not the case. In fact, the market was on its way to establishing a support pivot at its current level.

Today's late session weakness is most likely attributed to the delay of the healthcare vote, which was scheduled for today. The markets did close above minor support levels, but gave up all their gains. Keep an eye on these support levels to see if the pivot forms or fails.

Tuesday, March 21, 2017

The markets made a strong move lower today – the first that we have seen in a while. All three majors gave back more than -1% today, with the Nasdaq closing down over -1.8% on the day.

The VIX moved higher, but didn't manage to break above 13, settling at 12.50. This doesn't mean that the bearish move is over and that the markets are due for a change of direction here, but we have seen the bulls answer days like today in the past.

Don't be afraid to add bearish plays here, since today's range and volume both show promise to some bearish follow-through over the next few days. However, do not abandon the bullish side just yet. Although we did close below support levels, they are minor support levels overall. Keep in mind volatility's effect on option premiums and be patient with your limit orders...don't chase trades!

Thursday, March 16, 2017

The markets hesitated today after making a decent move higher yesterday. The FOMC raised interest rates by 25 basis points (0.25%), which was in line with market expectations. We saw an almost direct rally after the announcement, retracing only slightly into the close.

We expected a little hesitation like today's move after the FOMC event and initial reaction. Although the markets closed lower, it was on less volume and did not retrace much of yesterday's gains. This action should lean our bias toward the bullish side. We might see another flat to slightly lower day tomorrow; however, if the markets push higher, then we should look to adding bullish trades going into the weekend.

Monthly options expiration for March is tomorrow. Make sure to close out anything that expires and/or make necessary adjustments.

Tuesday, March 14, 2017

The markets appeared to have settled on the current support levels. Volume has subsided, for the moment, and even though the VIX moved higher, it never made it past 12.50.

There hasn't been any real change in market sentiment, so we are still very bullish. This correction hasn't threatened any real support levels or shown signs of making any major tests of support in general. Things can always change; however, we don't expect much movement between now and the end of the week without a catalyst.

Thursday, March 9, 2017

All three majors posted doji candles today on their respective support levels. This correction has been consistent and steady over the last week. Volume has remained steady, but today was a little higher than the last few days' average.

The next technical step will be to establish a pivot point at this level. This would confirm a bull pullback. We could see more selling tomorrow, so consider waiting until we get a close above a previous day's high before entering bullish trades.

Tuesday, March 7, 2017

The markets continued to move lower this week, as we are now starting to string together a small correction. The markets are indeed pulling back here...and with very little intra-day volatility. The VIX remains low and overall market volume remains average while we wait to see what happens at the next support levels. Look to 20,800, 2,350 and 5,800 on the INDU, S&P and Nasdaq, respectively.

The markets are still in corrective mode here. Although it appears to be a light pullback so far, we should expect some sort of push lower by the bears before the markets turn higher. Keep an eye on the above-mentioned support levels and market volume.

Thursday, March 2, 2017

The markets closed down today; however, more significantly, they closed near the lows of the day. We haven't seen a candle like today's candle since late December 2016. Today's candle followed a strong surge and gap higher in the markets. We could be seeing the first signs of exhaustion here. As always, tomorrow's candle will tell us more.

We may be seeing the beginning of a correction. If this is the case, then we need to treat it simply as a correction and not necessarily something more nefarious. There are many different points where the markets could correct to or consolidate on.

Look to adding sideways positions in the short term, but don't give up your longer-term bullish outlook. Sideways positions should help if the markets correct strong or simply consolidate.